NOT RECOMMENDED F OR P UBLICATION F ile Nam e: 13a0103n.06 No. 10-2167 UNITED STAT ES COURT OF AP P EALS F OR THE S IXTH CIRCUIT

DONAL D MAYNA RD BUF FI N, J R., Petitioner-Appellant,

v. UNI TED STATES OF AMERI CA, Respondent-Appe llee. ) ) ) ) ) ) ) ) ) ) ON APPEAL FROM THE UNI TED STATES DI STRI CT COURT FOR THE WES TERN DI STRI CT OF MI CHI GAN

OPI NI ON

Be fore : COL E and DO NAL D, Circuit J udg es; RUSSEL L , District J udg e. *
BERNICE BOUIE DONALD, Circuit Judge. This case involves the question of whether the Supreme Court ’s d ec i s i o n in United States v. Santos , 553 U.S. 507 (2008), require s us to interpre t “proc eeds” as “prof its” for purposes of conce alment money launder ing under 18 U.S.C. § 1956. We hold that it does not, and acc ording ly AF F IRM the dec ision of the district court.
I

. Donald May

nard Bu ff

i n , J r., was a salesman and an office manag er for a fra udulent investment business known as Acc ess Fina n ci al (“ Ac cess”). See United States v. Flynn , 265 F. App’x 434, 436 (6th Cir. 2008). Acc ess claimed to be a profitable investment enter prise, providing larg e “re turns” to clients. Id. T h e co m p an y , howeve r, was a Ponz i scheme that relied on redistributions of invested pr incipal and mailed “ newsletter ” update s to further the s cheme

. Id. at

The Honorable Thomas B. Russell, Un i t ed S tates Dist rict J udg e for the W estern District * of Ke ntucky , sitti ng by

desig nation.No. 10-2167

Buffin v. United States 443. Buf fin’s co- defe ndants, including the masterminds of the f raudule nt scheme, amassed $20.7 milli on in total rec eipts, with $8.4 milli on being redistributed to investors, $4.8 milli on diverted for
persona l use, and $7.3 milli on used fo r ancillary transfe rs and pay ments. Id. at 437-38. The conspirator s funnele d money throug h a co m plex web of bank acc ounts, keeping no rec ords as to wher e their inve stors’ funds had g one. See id. at 438. As offi ce manag er, Buf

fin was responsible for pay roll and manag ement of Acc ess’s bank

acc ounts. To collect his own compensat i o n from Access, Buff in set up a checking acc ount under the name “His Wil l Ministrie s . ” I n turn, he used funds from this acc ount to pay his persona l
expenses. During his tim e at Ac cess, B uffin hosted seminar s to obtain new investor funds to f eed into the scheme. H e also diver ted investor funds into his own acc ount, w hich he used for his own
persona l expenditures. A g rand jury returne d an eig hty -three count superse ding indictment char g ing Buf fin and his co-de fenda

nts with various counts of mail fra ud, conspirac y to commit mail fra ud, conspirac y t o commit money launder ing, conspirac y to defr aud the United States of income tax, promotion money launder ing, and conce alment money launder ing. On J u n e 14, 2005, afte r a five-w eek jury trial, Buf fin was found g uilty on all counts. He was sentenc ed to 180 months in prison. Buf fin appea led; this court aff

irmed his conviction and se ntence

. See ge nerally Flynn , 265 F. App’ x at 434. T h re e y ea rs afte r hi s conviction, t he S upreme Court issued its decision i n United St ates v. Santos , 553 U.S. 507 (2008). J ustice Stevens issued a concur ring opinion in which he explained that “proc eeds” for purposes of the money -launde ring statute could be interpre ted as requiring a showing of profits in some case s and g ross rec eipts in others, see id. at 524-28 (Stevens, J ., concur ring ); this - 2 -No. 10-2167

Buffin v. United States
court rec og nized J ustice Stevens’s concur renc e as the controlling opinion in United States v. Kratt , 579 F.3d 558, 562 ( 6th Cir. 2009). I n light of the Santos decision, Buffin filed a mot ion to vacate hi s sentenc e p u rs u ant t o 28 U.S.C. § 2255. The district cour t denied his § 2255 motion and denied issuanc e of a cer tificate of
appea lability , explaining that Buf fin proce durally defa

ulted his claim and that h e was unable to demonstrate either (1) cause and prejudice or (2) actua l innocenc e. Buf fin timely appea led. We
g rante d a cer

tificate of appea lability to deter mine “[w]hether the g overnme nt failed to establish that the proce eds used to convict Buf fin of money launder ing wer e profits rathe r than g ross income, and whether such a showing was re quired by United States v. Santos , 553 U.S. 507 (2008).” I I

. I f a sentenc e imposed by a fede ral court is “ not a uthorized by law or [i s] otherw ise open to collater al attack,” the court must, upon motion of the p et i t i o ner in custody , “vac ate and set the judgme nt a side and . . . discha rg e the pr isoner or r esente nce him or g rant a new tria l or corr ect the
sentenc e as may appea

r appropr iate.” 28 U.S

. C. § 2255 (2006). Gene rally , collater al revie w is improper if the issues raised in the habea s petition a re not f irst r aised on direc t a

ppeal and are thus
proce durally defa

ul t ed

. S ee Vanwinkle v. United States , 645 F.3d 365, 369 (6th Cir. 2011). Procedur al defa

ult, howeve r, may be excused “if the defe ndant can first demonstrate either ‘ca use’ and actua l ‘pre

judice,’ or that he is ‘ac tually innocent.’” See id. (quoting Bousley v. United States , 523 U.S. 614, 622 (1998))

. I n revie wing a denial of a motion under 28 U.S.C. § 2255, “we apply

a de novo standard of revie w to the leg al issues and uphold the fac tual finding s of the district court unless they are clea

rly err oneous.” Hamblen v. United States , 591 F.3d 471, 473 (6th Cir. 2009)

. - 3 -No. 10-2167

Buffin v. United States Buf fin claims that the Santos decision constitutes a n in te r v e n in g Supr eme Court decision that

serve s as cause to e x cuse his pr ocedur al defa ult. To support his a

rg ument, he cites our decision in Hilliard v. United States , 157 F.3d 444 (6th Cir. 1998), wher e we held that a habea s petitioner could “show sufficie nt cause for his belated objection” beca use an i n t ervening Supreme Court decision made errone ous previously -ac cepta ble j ury instructions. See id. at 450. As we have not relied on Hilliard since 2000, we have doubts as to its continuing vitality

. See generally Clay v. United States , No. 98-5243, 2000 WL 222563 (6th Cir. Fe b. 18, 2000). Moreove r, our sister circ uits have declined
to conclude that the interven i n g chang e cre ated by Santos provides sufficie nt cause to excuse proce dural defa

ult, e ven in instances wher e prior circ uit pr ece dent previously fore closed a Santos

ty pe arg ument. See United States v. Thorn , 659 F.3d 227, 233 (2d Cir. 2011) (“A defe ndant cannot establish cause for a proce dural defa ult by showing ‘simply that a claim was unacc eptable to that particula r cour t at that particula

r time.’” ( quoting Bousley , 523 U.S. at 623)). Mindful of these conce rns, we decline to adjudicate this case under the cause -and- prejudice
prong of the proce d u ra l d ef ault analy sis. The actua l innocenc e prong provides an adequate framework by

which we may

better a naly ze the substance of Buf

fin’s claims. See, e .g. , W ooten v. Cauley , 677 F.3d 303, 306 (6th Cir. 2012)

. Under this standa

rd, actua l innoc ence is de monstrated by showing “(1) the exis tence of a new interpre tation of statutory law, (2) which was issued afte r the petitioner had meaning ful time to incor p o ra t e the new interpre tation into his direc t appea ls or subsequent motions, (3) is r etroa ctive, and (4) a pplies to the merits of the petition to make it more likely than not that no rea sonable juror would have c onvicted him.” Id. at 307-08.

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Buffin v. United States T his court has previously held t hat t he procee ds-equa ls-profits interpre tation of 18 U. S

. C

. § 1956 is “a new interpre tation of statutory law.” See United States v. Kratt , 579 F.3d 558, 560 (6th Cir. 2009); see also W

ooten , 677 F.3d at 308. Buf fin’s direc t appea l was decide d four months prior
to the Supreme Court’s decision in S a ntos

. See generally Flynn , 265 F. App’x at 444. Thus, the intervening chang e occur red afte r he had “a me aning ful time to incorpora te the new interpre tation into his di rec t a

ppeals.” See W

ooten , 677 F.3d at 307-08. The W ooten court further held that “the

new definition of a key phrase in the money launder ing statute [was] a substantive chang e of law,” there fore “incr eas[ing] the g overnme nt’s bu rd en of proof” and making the Santos decision a
retroa ctively applicable one. Id. at 308-09. Wit h the first three prong s of the actua l i n nocenc e inquiry satisfied, the only

rema ining query is w hether the Santos decision, as a pplied to the merits

o f t h e petition, “make [s] it more likely than not that no rea sonable juror would have convicted [Buffin].” See id. at 308. I I I

. “Unde r the Santos-Kratt

fra mework, a

merg er pr oblem arises w hen def ining ‘ proce eds’ a s ‘re ceipt s ’ autom atically makes commission of the predic ate offe nse a commission of money launder ing and wher e the predic ate offe ns e ca rr ies a much lower statutory maxi mum than the associate d mo n ey launder ing char g e.” United States v. Crosgrove , 637 F.3d 646, 655 (6th Cir. 2011). Put differ ently , if the predicate offense is, standing a lone, “suff icient to prove both money launder ing and mail/wire fra ud,” the two crimes potentially merg e. See W ooten , 677 F. 3 d at 310 (citing Crosgrove , 637 F.3d at 655). For purposes of Santos , howeve r, the merg er must “ radic ally

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Buffin v. United States incre ase[] the sentenc e for that crime.” See Kratt , 579 F.3d at 562 (quoting Santos , 553 U.S. at 528 (Stevens, J., concurring )). Having established the basic g uideposts of our inquiry , we must now take the peculiar step of explaining wha t does not g overn our

analy sis today . After

the close of

briefing in this ca se, we issued our opinion in Jamieson v. United States , 692 F.3 d 4 3 5 (6t h Cir. 2012) (per curia m) ( Jamieson II

). I n that case , we held that “[b] eca use the predic ate offe nse of mail fra ud [under § 1341] car rie[d] a maxi mum sentenc e that [was] alre ady g rea ter than or equal t o t h e m axim um statutory sentenc e u n d er § 1956,

. . . there [was] no risk that merg ing the predic ate offense would incre ase J amieson’s sentenc e.” Id. at 441. Whil e the Jamieson petitioner was convicted of char g es arising from offe nses committed be tween 1996 and 2000, see United States v. Jamieson , 427 F.3d 394, 399-400 (6th Cir. 2005) ( Jamieson I

), we looked to the curr ent statutory maxi mum sentenc e to deter mine whether the offe nses merg ed for Santos purposes. See Jamieson II , 692 F.3d at 441 (“A mail fraud c onviction under § 1341 c arr ies a maximum sentenc e of twe nty y ear s. . . .”). I t appea rs that Jamieson II direc ts us to consider the curr ent statutory maxi mum for offe nses committed prior to 2002, a categ ory that Bu ffin’s offe nses certainly fall under. At this point, it is worth noting that 2002 w a s th e y e a r th a t th e tw e n ty -y ear maxi mum sentenc e was statutorily imposed. See Sarbane s-Oxley Act of 2002, Pub. L

. 107-204, § 903(a) , 116 Stat. 745, 805. Prior to this, the statutory maxi mum fo r mail fra ud was five y ear s. See 18 U.S.C. § 1341 (2000). I n light of these

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Buffin v. United States observa tions, Jamieson II ’s considera tion of the curr ent statutory scheme for a predic ate offe nse of mail fraud tha t occur

red pr ior to 2002 appea

rs to conflict with Supreme Court pr ece dent. ** Absent contra

ry cong ressional intent, we are direc ted by the Supreme Court to prospec tively apply revisions to se ntencing statutes only to “ case s in w hich that initial off ense occur

red afte r the eff ective date of the amendment.” Johnson v. United States , 529 U.S. 694, 702 (2000). We ignor ed that direc tive in Jamieson II by considering the curr ent statutory maxi mum for a pre- 2002 mail fra ud offe nse, but decline to do so ag ain here s i m p l y fo r the sake of maintaining consistent circ uit
prec edent. Whil e we acknow ledg e the vener able principle that “one panel of a circ uit court will not

overr ule the decision of another panel” and that “only the court sitti ng en banc may overr ule a prior decision of a pane l , ” s ee Un ited States v. Smith , 73 F.3d 1414, 1418 (6th Cir. 1996), the
counter vailing principle that we are in no position to disreg ard the prec edent of the Supreme Court
must preva il here

. See Stewart v. Blackwell , 444 F.3d 843, 874 (6th Cir. 2006) (“[W] e, as an inferior

co urt, are not in a position to disreg ard Supreme Court prec edent.

. . .”), supersede d on oth er grounds by 473 F.3d 692 ( 6th Cir. 2007) (en ba nc).

Jamieson II also appea

rs to conflict with circ uit prec edent. The panel’ s decision to confla te ** conspirac y under § 371 with the predic ate offe nse of money launder ing conflicts with our decision in Crosgrove. Compare Jamieson II , 692 F.3d at 441 (re asoning that, as mail fra ud is the underlying predic ate offe nse for a § 371 conspirac y char g e, the maxi mum statutory sentenc e is eff ectively twenty y ear s for such conspirac y char g es), with Crosgrove , 637 F.3d at 655 (“I n Crosg rove’ s case , the statutory maxi mum for conspirac y to commit mail/wire fra ud was five y ear s. . . .”). This latent conflict with circ uit prec edent further buttresses our decision not to rely on Jamieson II

. See Darrah v. City of Oak P a rk , 2 5 5 F. 3 d 301, 310 (6th Cir. 2001) (“[W] hen a later decision of this court conflicts with one of our prior published decisions, we are still bound by the holding of

the ea rlier case .” (c itations omi tted)). - 7 -No. 10-2167

Buffin v. United States Henc e, notwithstanding Jamieson II , we observe the following : th e applicable statutory maxi mum for mail fra

ud in the prese nt case is fi v e y ears. The applicable maxi mum for money launder ing is, and has been, twenty

. See 18 U.S.C. § 1956(a) (2000). Acc ording ly , the second prong of the Santos-Kratt inquiry is satisfied: the predic ate offe nse of mail fra ud, under t h e pre- 2002
sentenc ing scheme , “ca

rries a much lower statutory maxi mum than the associate d money launder ing char g e.” See Crosgrove , 637 F.3d at 655. Our only rema ining inquiry is whether “a merg er problem arises when defining ‘proc eeds’ as ‘re ceipts’ automatically makes commission of the predic ate offe nse a c ommissi on of money launder ing.” Id.

I V. The Gover

nment rea dily conce des that “B uffin has satisfied the require ments for collater al relief ” as to the promotional money launderi n g counts at issue in this case . As a result, the

conce ssion obviates any need to addre ss the issue further

. See United States v. Judge , 649 F.3d 453, 455 n.2 (6 t h Cir. 2011). I nstead, the Gover nment has opted to place all its prover bial eg g s in the basket of conce alment money launder ing. This narr ows our inquiry acc ording ly ; we must now deter mine whether defining “proc eeds” as “re ceipts” trig g ers a merg er problem wher e the predic ate offe nse of mail fra

ud would automatically lead to a commission of conce alment money launder ing. We conclude tha t it does not. Buf fin arg ues that, under Kratt , the definition of proce eds “must have the s am e m eaning throug hout the money -launde ring statutes even if that means apply ing a profits definition to money launder ing pr ovisions that do not create a mer g er pr oblem.” B uffin re ads Kratt as sug g esting that
proce eds means profits for ea ch o ff en s e under § 1956. ( See Reply Br

. at 6 (“F or a particula r - 8 -No. 10-2167

Buffin v. United States predic ate offe nse, if the Santos rule applies under any provision of the statute, then ‘proc eeds’ means profits for e ach of

§ 1956' s provisions.”)). This a rg ument misint erpr ets our holding in Kratt

. Our decision there did not establish that the definition of proce eds must apply c o n s iste ntly throughout eac h of the money -launde ring statutes; instead, we deter

mined that the definition of proce eds must apply consistently across both statutes. Be cause § 1956 and § 1957 “cr iminaliz e simil ar acts

. . . and simply do so from slightly differ ent
ang les,” and b ec ause the “same predic ate offe nses—more than 250 of them” are cover ed by both statutes, the Kratt court saw a need to maintain c onsistency betwee n both statutes. See Kratt , 579 F.3d at 560-61. We said nothing to sug g est that “proc eeds” must be interpre ted as “prof its” for all offe nses of the sa

me statute. To the contra

ry , we conclude d the opposite. We acknow ledg ed the “unsatisfy i n g” rea lity
t h at, by hewing closely to J ustice Stevens’s concur renc e in Santos , we would need to “de fi n e ‘proc eeds’ for over 250 predic ate offense s[,]

. . . a reg ime th at m ay gen er at e a cottage industry of Santos litigation for y ear s to come.” Id. at 563. I t i s t ru e t hat we g ener ally “interpr et statutory l anguag e as a coher ent whole and g ive consistent meaning to terms throug hout the statute.” S ee United States v. Erpenbec k , 532 F.3d 423, 441 (6th Cir. 2008) (citation and q u o t at ion marks omitted). We overr ode that presumption in Kratt , howeve r, when we esche wed t h e Santos plurality ’s rationale in favor of J ustice Stevens’s offe nse-by -off ense approa ch. See Kratt , 579 F.3d
at 562 (using the Marks doctrine to conclude that following J ustice Stevens’s approa ch as a “subset” of the plurality ’s was the proper way to interpre t Santos ). There fore , Buf fin’s arg ument contra dicts the ver y hear t of our post- Santos jurisprudenc e. - 9 -No. 10-2167

Buffin v. United States Rejecting Buf

fin’s arg ument, howeve r, does not definitively answe r the question of whether there is merg er here. I n attempting to do so, we must be mi ndful that our i nterpre tation of Santos “re quires us to apply a defendant-unfriendly approa ch.” Kratt , 579 F.3d at 563 (empha sis in orig inal). W e b egi n with the elements: commission of mail fra ud does not “automatica lly ” lea d t o

comm ission of conce alment money launder ing. See Crosgrove , 637 F.3d at 655. To p ro v e m ai l fra ud, the Gover

nment must show “(1) a scheme or artifice to defr aud; (2) use of mails in further ance of the scheme ; and (3 ) i n t en t to deprive the victim of money or proper ty .” See United States v. McAuliffe , 490 F.3d 526 , 5 3 1 (6 th Cir. 2007) (citation omitted). To prove conce alment money launder ing, the Gover

nment must demo n s t ra t e: “(1) use of funds that are proce eds of unlawful activity ; (2) knowledg e that the funds are proce eds of unlawful activity ; and (3) conducting or attempting to c onduct a financ ial transac tion, knowing that the transac tion is desig ned in whole or in pa rt to disg uise the nature , location, source , owner ship, or control of the pr ocee ds.” See United States v. Baltimore , 482 F. App’x 97, 983 (6t h Cir. 2012) (citing 18 U.S.C. § 1956(a) (1)( B) (I ); United States v. Prince , 214 F.3d 740, 747 ( 6th Cir. 2000)). Proving mail fra

ud could satisfy the first two prong s of the conce alment analy sis: it would

serve as t h e foundational fruits of unl awf ul activity that a prospective launderer would then t ry to

conce al. Mail fra

ud, howeve r, ty

pically does not require the additional step of proving that someone in possession of unlawfully obtained funds has condu cted, or attempted to conduct, a financ ial
transac tion to “disg uise the nature , location, source , owner ship, or control of the proce eds.” As the elements of mail fra

ud are not entirely coextensive wi t h the elements of conce alment money

- 10 -No. 10-2167

Buffin v. United States launder ing, the “automatic” commission that serve s as the foundation for merg er under the SantosKratt framework is abse nt in this case . The indictment further buttresses our conclusion. I n Crosgrove , we observe d that the crimes of conspirac y to commit mail/wire fra ud and conspirac y to commit money launder ing merg ed. See Crosgrove , 637 F.3d at 655. I n doing so, we examined the indictment and found that “the pay ments Crosg rove rec eived for his service s as an attorney and claims adjuster” serve d as the fac tual predic ate for both co nspiracy char g es. See id. We noted that “[t] he indictment itself

. . . reve al[ed] the Gover nment’s position that co n s p i ra cy to commit mail/wire fra ud would, without any additional action by Crosg rove, a lso constitute a money launder ing c onspiracy .” Id. This is not so in the i nstant case . The Government relied on a series of s ep ar at e predicate acts, i.e., Buf

fin’s depositing of chec ks to “His Wi l l M inistries,” to serve as the basis for proving

conce alment money launder ing. I n contra st, Bu ff i n ’s mail fra

ud convictions wer e premised primarily on newsletter mailings and fra udulent chec ks to investors. The Gover nment’s relianc e on separ ate f actua l predica tes supports the notion that the crimes do not “obviously merg e” he re. Finally , the weig ht o f au thority from our sister circ uits supports our decision today

. The Seventh Circuit in United States v. Aslan , 644 F.3d 526 (7th Cir. 2011), held that there was no merg er betwee n conce alment money launde ri n g an d the predic ate offe nse of wire fra ud, as the

conce alment “for

med an entirely separ ate offe nse of money launder ing.” See id. at 546. Wire fra ud, the court rea soned, “punishes the scheme , not its succe ss,” wher eas money launder ing dealt with the fruits of the fra

ud. See id. at 545-46. The court rea ffirme d this observa t i o n in United States v. Hosseini , 679 F.3d 544 ( 7th Cir. 2012) , wher e it r eitera ted that “the merg er problem dissipates [in - 11 -No. 10-2167

Buffin v. United States

conce alment money launder ing case s] when the g overnme nt alleg es that the defe ndant specific ally
enter ed into a transac tion to conce al the source or nature of ill-gotten g ains.” Id. at 552. The Ninth Circuit has come to a simil ar conclusion in its case s, particula rly in United States v. W

ilkes , 662 F.3d 524 (9th Cir. 2011), wher e it explained t h at t h e S a ntos decision did not “re quire[] the jury in s tr uctions reg arding [concea lment] money launder ing to define ‘proc eeds’ as ‘prof its.’” Id. at 549. W e s ee n o reason to deviate from these conclusions, in light of our own analy sis establishing t h e

same. V. T h i s leave s us with a Solomoni c dilemma: Buf fin’s convictions for promotio n m o n ey launder ing are invalid, but his sentenc e can never theless be sustained by h i s conviction for

conce alment money launder ing. The Gover nment asks us to invoke our discretion o f i n ac t i o n, namely in the form of the concur rent sentenc ing d o ct ri n e, whi ch allows us to “dec line to hear a substantive challeng e to a conviction when the sentenc e on the challeng ed conviction is being serve d

concur rently with an equal or longe r sentenc e on a valid conviction.” United States v. LaPointe , 690 F.3d 434, 439 n.1 (6th Cir. 2012) (quoting Dale v. Haebe rlin , 878 F.2d 930, 935 n.3 (6th Cir. 1989)). Whil e it is true that we must consider “adve rse collater al conseque nces” such as “dela y of elig ibilit y for parole , a h arshe r sentenc e under a rec idivist statute for any future offe nse, cre dibilit y impeachme nt, and societal stigma,” Uni t ed S t ates v. DeCarlo , 434 F.3d 447, 457 (6th Cir. 2006),

we must be mindful that those conseque nces are most salient o n direc t appea l, not on a collater al challeng e. Wit h no compelling rea son to decide otherwise, we adhere t o our g ener al principle of

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Buffin v. United States “dec lin[ ing] to collater ally revie w sentenc es that fall within the statutory maxi mum.” United States v. Pe terman , 249 F.3d 458, 462 ( 6th Cir. 2001). VI

. For these re asons, we AF F IRM the dec ision of the district court.

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